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Factbox - Impact on banks from Britain's vote to leave the EU
September 25, 2017 / 10:36 AM / in 23 days

Factbox - Impact on banks from Britain's vote to leave the EU

(Reuters) - Global banks have said they could move thousands of jobs out of Britain to prepare for Brexit, the country’s planned exit from the European Union.

Financial services companies need a regulated subsidiary in an EU country to offer products across the bloc, which could prompt some to move jobs out of Britain if it loses access to the European single market.

Around 10,000 finance jobs will be shifted out of Britain or created overseas in the next few years if the UK is denied access to the single market, a Reuters survey of firms employing the bulk of workers in international finance shows.

Following are related stories about top banks (in alphabetical order):

ASSOCIATION OF FOREIGN BANKS IN GERMANY

The association expects 3,000 to 5,000 new jobs in Frankfurt over the next two years as a result of Brexit, its head Stefan Winter, of UBS, told Welt am Sonntag in June. He said he expected 12 to 14 major banks to expand their Frankfurt sites significantly or build new ones.

BANK OF AMERICA CORP

Bank of America became the first Wall Street lender to pick Dublin as a new base for its EU operations.

Bank of America said in August that its businesses and results could be adversely affected and it may have to incur additional costs if Brexit limited the ability of its UK entities to conduct business in the EU.

Dublin is Bank of America’s default option, but other centres are on the table and no decision has yet been made, an executive said on March 14.

BARCLAYS

Barclays has signed a lease agreement for more office space in Dublin as it prepares to expand its operations there to cope with the impact of Brexit.

It said in July that it was talking with Irish regulators about extending its activities in Dublin.

Chief Executive Jes Staley has said that Barclays will keep the bulk of its activities in Britain and any changes to how the bank operates would be small and manageable.

BNP PARIBAS

BNP Paribas may move up to 300 London investment bank staff because of Brexit, depending how clients adapt and the French bank’s efforts to win new UK business, a source said.

The company had 3,123 staff in its corporate and institutional bank in Britain at end-2016, down from 3,294 a year earlier, internal documents seen by Reuters showed.

CITIGROUP

Citigroup is at an advanced stage in plans to move part of its private banking unit from London to Madrid, a source familiar with the matter said.

The U.S. bank has said it may need to create 150 new jobs in the EU and confirmed it would headquarter its EU trading operations in Frankfurt.

Citi, which has a large banking unit in Dublin, had previously said it would choose Frankfurt as its hub for sales and trading in the EU and move “a couple of hundred” jobs outside of London.

Separately, the bank’s European chief said Citi would make a decision on Brexit contingency plans in the first half of the year and choose from a number of potential EU countries to relocate some investment banking business.

CREDIT AGRICOLE

Credit Agricole, France’s third-biggest listed bank, could relocate about 100 employees from its London hub to France out of 1,000 based there in the case of a “hard” Brexit, its chief executive said.

Credit Agricole is to move its European government bonds trading platform from London to Paris in September 2017, a spokeswoman told Reuters.

CREDIT SUISSE

Credit Suisse’s Chief Executive Tidjane Thiam said in September that his bank was relatively well placed to deal with Brexit and that only 15-20 percent of volumes in the investment bank would be affected.

DAIWA SECURITIES GROUP

Japan’s No. 2 brokerage Daiwa Securities Group said it will set up a subsidiary in Frankfurt, making it one of the first banks to publicly choose Germany to keep a foothold in the EU.

The group has said it would still keep staff in London even after Brexit. It has 450 staff working in the EU now, mostly in the British capital.

The German city is Daiwa’s favoured destination, as London-based staff can easily be transferred to its investment banking branch in Frankfurt, Chief Executive Seiji Nakata said.

DEUTSCHE BANK

Deutsche Bank is beefing up its presence in Frankfurt. Chief Executive John Cryan said the German lender expected to add new jobs in Frankfurt, where it will replicate a structure that is interchangeable with its London operations and evolve as Brexit negotiations unfold.

Deutsche Bank warned in April that up to 4,000 UK jobs could be moved to Frankfurt and other EU locations - the highest potential move of any bank.

European supervisors want Deutsche Bank to prepare a fallback plan, laying out how it could shift the clearing of trades from London, one person told Reuters.

Deutsche Bank is “uncomfortable” with the uncertainty over regulations following Brexit, a senior official at Germany’s biggest bank said.

EUROCLEAR

Settlement bank Euroclear is looking at setting up a branch or subsidiary to provide a route between its UK and Irish markets, the head of its UK and Irish operation said.

FRENCH BANKING FEDERATION

French banks could shift about 1,000 jobs from London to Paris to keep staff in the EU, the French Banking Federation said.

GOLDMAN SACHS

U.S. bank Goldman Sachs is considering moving up to 1,000 staff to Frankfurt because of concerns over Brexit, Handelsblatt reported in January.

Goldman will begin moving hundreds of people out of London before any Brexit deal is struck as part of its contingency plans, its Europe CEO said in March.

Wolfgang Fink, co-chief of Goldman Sachs in Germany, said it may triple or quadruple its presence in Frankfurt.

HSBC

HSBC could spend up to $300 (221.88 pounds) million moving jobs and parts of its business to Paris, CEO Stuart Gulliver said. The estimate includes the costs of relocating up to 1,000 jobs to the French capital and associated legal fees.

INVESTEC

Investec is considering converting its London bank’s Dublin branch into a subsidiary to ensure it has continued access to the European single market, Chief Executive Stephen Koseff told The Telegraph in May.

However, the Anglo-South African lender and asset manager would see only a small part of its business affected by Brexit, the newspaper quoted Koseff as saying. (bit.ly/2qywZzY)

JPMORGAN

JPMorgan Chase, the biggest U.S. bank by assets, said in July that the bank would probably use Frankfurt as the legal domicile of its European operations after Brexit, though jobs could be moved elsewhere as well.

The U.S. bank has also agreed to buy a Dublin building with room for 1,000 staff in the first sign of a financial services company expanding significantly in Ireland since the government began a major campaign to attract businesses after Brexit.

However, the bank, which employs about 500 people in Dublin, did not say how many jobs would be created or whether any positions would be moved from the United Kingdom.

JPMorgan has chosen Warsaw to host a new global operations centre that will employ several thousand people over the next few years, Polish Deputy Prime Minister Mateusz Morawiecki said.

The estimates of financial services jobs moved from all Western countries to Poland range from 35,000 to 45,000, with Britain’s decision to exit the EU seen accelerating this.

JULIUS BAER

Julius Baer, Switzerland’s third-biggest private bank is moving its European hub from Frankfurt to Luxembourg but will continue to keep its options open in London, chief executive Boris Collardi has said.

Brexit opens the door for a UK-Swiss deal covering financial services, said Collardi.

Julius Baer is opening three new UK offices as it looks to bank for wealthy residents spooked by Brexit.

LLOYDS BANKING GROUP

Lloyds Banking Group, Britain’s largest mortgage lender and the only major British retail bank without a subsidiary in another EU country, is close to selecting Berlin as a European base to secure EU market access.

MORGAN STANLEY

Morgan Stanley has chosen Frankfurt to be a new base for its EU operations, a source familiar with the matter said.

It is planning to use its Frankfurt subsidiary as the centre for its EU trading operations. “That means 200 new people will be coming to Frankfurt,” the source said.

Morgan Stanley has identified many of the roles that will need to be moved from Britain, sources involved in the processes said.

The U.S. bank, which bases the bulk of its European staff in Britain, will have to move up to 1,000 jobs in sales and trading, risk management, legal and compliance, as well as slimming the back office in favour of locations overseas, one source told Reuters.

Morgan Stanley could initially shift 300 staff from Britain after its EU exit and is scouting for office space in Frankfurt and Dublin, Bloomberg News reported in February.

The bank plans to double the number of its bankers in Frankfurt to 400, Welt am Sonntag reported in June.

MIZUHO

Japan’s Mizuho Financial Group said it would set up a subsidiary in Frankfurt, the latest Japanese bank to choose the German city as its new base in the European Union as Britain prepares to leave the bloc.

MITSUBISHI UFJ FINANCIAL GROUP

Japan’s Mitsubishi UFJ Financial Group Inc said in September that it has picked Amsterdam as its EU investment banking base.

NOMURA

Nomura Holdings Inc is applying for a licence to operate a new entity in Frankfurt.

NORTHERN TRUST

Asset management company Northern Trust has said it will set up an EU banking base in Luxembourg.

Around a third of Northern Trust’s institutional clients have asked it to ringfence British exposure from their broader European portfolios to protect them from Brexit-related risks.

RBS

Royal Bank of Scotland said it may move up to around 150 jobs to Amsterdam after Brexit.

RBS also said it was in talks with the Dutch central bank to use a licence it has in the Netherlands to conduct some Natwest Markets business there if it becomes necessary.

RBS Chief Executive Ross McEwan said the bank will enact its Brexit plans by the end of March 2018 if no clarity emerges about Britain’s ability to retain access to the single market.

SOCIETE GENERALE

Societe Generale could move 400 corporate and investment banking jobs from London, with most going to Paris, Chief Executive Frederic Oudea said in July.

Oudea said the possible move of jobs after Brexit would affect 300-400 investment banking jobs out of 2,000 it has overall for that business in London.

STANDARD CHARTERED

Standard Chartered will need to spend around $20 million making Frankfurt its European base in order to secure market access to the European Union when Britain leaves the bloc, Chief Executive Bill Winters told Reuters in August.

SUMITOMO MITSUI FINANCIAL

Sumitomo Mitsui Financial Group Inc said its core banking unit, Sumitomo Mitsui Banking Corp (SMBC), has decided to set up a subsidiary in Frankfurt.

TD SECURITIES

TD Securities, the investment banking arm of Toronto-Dominion Bank Group, said it would expand operations in Dublin to bolster its European business in response to uncertainty triggered by Brexit.

UBS

UBS is weighing up whether to move banking jobs in London to Frankfurt, Madrid or Amsterdam to cope with Britain’s planned EU departure, Chief Executive Sergio Ermotti said in July.

The bank has estimated that it would need to “move 1,500 people” from London to the EU to retain full passporting rights, according to Chairman Axel Weber. That would be more than a quarter of its 5,500 staff in London.

The world’s biggest wealth manager has also set up a bank in Frankfurt to consolidate most of its European wealth management operations.

Compiled by Noor Zainab Hussain and Esha Vaish in Bengaluru; Editing by Rachel Armstrong/Alexander Smith

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